Japan to auction off 600,000 barrels of oil from national reserves

Japan's industry ministry has said it will hold an auction on February 9 to sell about 100,000 kilolitres, or 628,980 barrels, of crude oil from its national reserve as a part of a US-led coordinated release of oil reserve to cool rising prices.

The supply, to be taken from its Shibushi tank in southwestern Japan, will become available to the winning bidder on March 20 or later, it said in a statement on Monday.

"This is the first round of the planned releases and we will conduct more auctions when we are ready and while we closely watch the international energy markets," an official at the ministry told Reuters news agency.

Japan's government said last month that it would release "a few hundred thousand kilolitres" of oil in response to a US request, and the sale would be done as part of a switch in the composition of the types of oil held in the national reserve.

Drop in prices

Global oil prices have slipped by more than $5 a barrel since the ministry announced the plan late in November, as the spread of the Omicron coronavirus variant has raised concerns that fuel demand might decrease.

But industry minister Koichi Hagiuda said earlier this month that Japan's oil release plan remained unchanged despite the drop.

The US Department of Energy said earlier this month it will sell 18 million barrels of oil from the Strategic Petroleum Reserve, with offers from companies to purchase it due on January 4, as part of the release aimed at cooling fuel prices.